The first deepwater gas well by Russia’s state-run gas giant Gazprom and Venezuela’s state-run oil company PDVSA is shown on the Venezuelan continental shelf near Punto Fijo in Falcon state. (AP Photo/Miraflores Press Office)

Increasing evidence that OPEC production cutbacks were taking hold also helped support prices.

Light, sweet crude for December delivery was up $4.28 to $65.32 a barrel in electronic trading on the New York Mercantile Exchange by afternoon in Europe. The contract Friday rose 27 cents to settle at $61.04.

Oil traders have been looking to equity markets for signs of how severe the current global economic slowdown will be.

Crude oil prices were also bolstered by a falling dollar. Investors often use commodities such as oil as a hedge against inflation and a weaker dollar.

The euro gained to $1.2848 on Monday from 1.2715 on Friday while the dollar rose to 99.00 yen. “Oil has been highly correlated to stocks and the dollar,” said Clarence Chu, a trader with market maker Hudson Capital Energy in Singapore. “The spending plan may increase crude demand, which is already strong in China.”

Another production cut by OPEC may also boost prices. The Organization of Petroleum Exporting Countries could further reduce oil output if a decision last month to slash production doesn’t bolster plummeting oil prices, the group’s president Chakib Khelil said Saturday.

Khelil, who is also Algeria’s energy minister, said OPEC seeks prices between $70 and $90 per barrel. “If we go toward $55, I expect OPEC to call an emergency meeting and announce another cut,” Chu said. “The market expects them to cut again in December at the latest.”

On top of that, Vienna’s JBC Energy noted that cuts agreed upon last month in Vienna by the group’s oil ministers “finally hit the market last week, with Saudi Arabia, Iran and Nigeria all announcing cuts of the required magnitude, and there was speculation that Nigeria may reduce output even further.”

Oil prices have fallen about 56 percent since reaching a record $147.27 in mid-July.

In the long-term, rising demand in the developing world will likely push prices higher, the International Energy Agency said last week.

According to a summary of the agency’s World Energy Outlook report due to be published in full this week, the IEA has hiked its forecast for the price of a barrel of oil in 2030 to just over $200 in nominal terms, compared to last year’s estimate of $108 a barrel.

In other Nymex trading, heating oil futures jumped more than 10 cents to $2.08 a gallon, while gasoline prices gained over 8 cents to $1.43 a gallon. Natural gas for December delivery spiked nearly 39 cents to $7.14 per 1,000 cubic feet.

In London, December Brent crude rose $4.36 to $61.71 a barrel on the ICE Futures exchange. —

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